Beware the PR message from 'IVA factories'

I'm reading a book at the moment called Flat Earth News. Some readers may be familiar with it; it's by the journalist, Nick Davies, who broke the story in the Guardian last week about News Corporation's cover up. In it - an expose of the modern state of journalism - Davies spends some considerable time writing about the public relations industry and how PR increasingly plays a part in setting the news agenda.

Nothing new in this, but the steady influx of press releases from a particular breed of company over the past few weeks has brought his findings home in a particularly worrying way.

Dozens of debt management companies, sometimes known as "IVA factories" because of the individual voluntary arrangements (an expensive form of debt repayment plan) they peddle, have suddenly acquired the services of PR agencies. These agencies are contacting journalists with offers of help from their new clients with stories.

They typically describe their clients as companies offering "consumer advice on debt" or, worse, "free and impartial financial advice". The public relations consultant fails to mention (they may not even know) that if readers with debt problems do then contact them they will inevitably find themselves being cajoled into signing up for a "debt solution". These can be expensive, often unsuitable and, more often than not, peddled by salespeople who have no expertise in financial advice.

In 2006 I started writing about these companies because debt advice charities (the real thing) were becoming increasingly concerned that they were pushing people with large debts further into the red. At that time, trying to get hold of a spokesperson for one of these companies was close to impossible. Gill Hankey of the Bankruptcy Advisory Service (it offers real independent advice) recalls that back then, if you typed "bankruptcy" into Google, only the BAS and a handful of companies would be found. Now you would get close to 2,000 results. But these companies have not improved, she says. In fact, if anything, they have become worse, having seized the opportunity presented by a recession to make more money from more people - which, it seems, they are now using to create an "acceptable" face to the public.

Last week, the Office of Fair Trading refused a credit licence to one of these "factories" after it had been found to be misleadingly advertising "free help and advice" to consumers with serious debt problems. I hope more suffer the same fate and gradually fade back into obscurity. But until then, if you are taking advice about your debts, please be careful. On the plus side, if you do have problems we have plenty of press office contacts to turn to ...